Business planning Flashcards
What are the three levels of business management?
- Corporate Level
- Management Level
- Operational Level
What is a business plan?
A formal statement of the business goals, how they are obtainable and the plan for reaching these goals.
A document that defines the business objectives and suggests steps to be taken to realise the business strategy over the next 3 years.
Components of a Business Plan:
• Division of the business into service type or client segment
• Financial performance targets
• Plan business opportunities and allocate staff resource
• Budgeting and cash forecasting money in vs. money out to understand what you can afford to pay because you estimate what you will earn
• Plan business opportunities, identify the resource required.
A business plan could help to:
• Seek funding,
• To gain new instructions, new clients, new customers
• To help focus on key priorities
• To allow the organisation to respond to change
• For budgeting, and
• To set targets for staff.
What are the business objectives of your company?
• To develop and grow the business sustainably in the sectors:
o Commercial o Sports & leisure • Retain existing and gain new clients • Retain and train staff • Grow team to support senior members of staff
How do you contribute to business planning within your company?
Ensure the services I provide are to the companies & clients expectations, should lead to repeat business
Preparing & submitting fee quotes
Try to promote the services my company offer whilst carrying out my day to day duties
Offer our services whilst carrying out my day to day duties i.e. Party Wall or CDM services when we are only providing QS services on projects.
How do you manage your time so that you do not work beyond your fee allowance?
Recording my time weekly in timesheets spent against each job allows my workload to be reviewed by senior managers in monthly team meetings.
What should you do when starting a business?
Create a Business Plan, such as a 3 – 5 year business plan.
Why would you create a business plan?
- To help achieve funding.
- Set business objectives.
- Create a business direction.
What would you expect to be included within this business plan?
- Method Statement.
- Goals and Objectives.
- SWOT analysis.
- Key Performance Indicators.
What is a Mission Statement?
A formal summary of the company aims and values.
What is a SWOT analysis?
internal study undertaken by a business to identify its strengths, weaknesses, opportunities and threats.
What goals and objectives would you likely see in a business plan?
- Expected profit margin.
- Expected Turnover.
- Markets the company are looking to move into.
How is a business plan laid out?
- Executive summary.
- Financial Forecasts.
- Management team.
- Description of business opportunity.
- Market and Sales Strategy.
Why is Market Analysis important?
Increase sales through identifying areas of strength, and aligning these with opportunities.
How does an up-to-date business plan help an organisation?
- Helps achieve funding.
- Market previous work to clients.
- Bring focus the company priorities.
- Allows staff to align their goals with the company’s.
- Help set budgets.
Types of business plan
Strategic
Deparmental
Operational
Corporate
Accounting techniques
An accounting techniques or method refers to a set of rules a company adheres to when keeping financial records and reporting financial transactions.
The transactions are recorded in a manner that accurately reflects true income and there are two basic methods of accounting.
Cash accounting - Smaller construction firms often opt for the more straightforward cash-basis accounting system, where they simply record revenue when it is received and expenses when they are paid out.
Accrual accounting - Used where revenue or expenses are recorded when a transaction occurs, rather than when payment is received or made. The method follows the matching principle, which says that revenues and expenses should be recognized in the same period.
Forecasting techniques
Financial forecasting is important because:-
It tells whether the company is headed in the right direction
Estimates the amount of revenue and income that will be achieved in the future
Budgeting creates a baseline to compare actual results to determine how the results vary from the expected performance
A management tool / procedure to use rather than just carryout your business on a day to day basis, gives the business something to aim for / measure financial performance against
There is cash flow forecasting for companies & for individual projects
Cash is life blood of construction at both a company level & project level
Methods of financial bench marking
Financial bench marking involves running a financial analysis and making a comparison of the results of a company in order to assess it’s overall competitiveness, efficiency and productivity.
Common financial benchmarks include:- Gross, operating and net profit margins Sales and profitability trends Inventory Accounts receivable Accounts payable Turnover Salary and compensation data Revenue per employee Cost per employee Marketing expense as a percent of revenue Revenue to fixed assets ratio.
Why is it important to undertake business planning in order to achieve company objectives
A business plan is a very important and strategic tool for businesses.
A good business plan not only helps businesses focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve short-term and long-term objectives.
A well-written business plan is an important tool because it gives businesses, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow.
Business planning should be the first thing done when starting a new business.
Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.
Why does having a organisational structure help
An organisational structure will give employees more clarity, help manage expectations, enable better decision-making and provide consistency.
Organizational charts also assign responsibility, organize workflow and make sure important tasks are completed on time.
Organizational structure provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the company.
A formal outline of a company’s structure makes it easier to add new positions in the company, as well, providing a flexible and ready means for growth.
